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Why Star Peak Energy Transition Stock Jumped 26.1% in February

By Keith Noonan - Updated Mar 8, 2021 at 9:29AM

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The SPAC is up big since going public last year, but the stock is seeing volatile swings.

What happened

Shares of Star Peak Energy Transition (STPK) gained 26.1% in February, according to data from S&P Global Market Intelligence. The special purpose acquisition company (SPAC) stock surged thanks to excitement surrounding its upcoming merger with energy storage specialist Stem. 

STPK Chart

STPK data by YCharts

Star Peak is set to merge with Stem before the end of March, and the combined company will operate under the Stem name and trade on the New York Stock Exchange under the STEM ticker. Despite a big sell-off hitting growth-dependent tech stocks at the end of February, the appeal of the upcoming merger was enough to power big gains for the SPAC stock last month. 

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Image source: Getty Images.

So what

Stem uses artificial intelligence technology to improve the efficiency of clean energy storage and distribution, and it's angling to be at the center of this century's clean energy revolution. The company's Athena software platform helps customers lower energy costs, achieve better yields from renewable energy sources, and increase energy grid reliability. 

The market seems to like Stem's prospects, but SPAC stocks have proven to be highly volatile, and the company's share price has suffered a big pullback early in March's trading amid sell-offs for growth-dependent tech companies. 

Now what

Star Peak Energy Transition stock has seen big losses early this month. The company's stock trades down roughly 30% in March so far. 

STPK Chart

STPK data by YCharts

Even after the big pullback, Star Peak Energy stock is up roughly 154% since market close on the day of its initial public offering last August. The company has a market capitalization of roughly $1.2 billion. Stem is currently guiding for revenue of roughly $147 million this year, and Star Peak is trading at roughly 8.2 times that target. 

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